Spotify is testing a feature that does away with repetition in audio ads
Spotify is testing a new ad product that aims to do away with podcast hosts repeating the same promo code or vanity URL over-and-over again, the company tells Ad Age.
The repetition tactic—about as old as audio itself—is ineffective, the company says, while adding that measurement and targeting tools are rudimentary at best.
“The engagement model today has the host repeat a coupon code or vanity URL ad nauseam to not just create awareness, but long-term recognition for a consumer to enter into a browser later,” says Jay Richman, head of advertising business and platforms at Spotify. “I view that as a hack for a marketer to understand to any degree how their campaign is performing.”
To that end, the audio-streaming giant is testing In App Offers, which allows consumers to claim promotions or visit a brand’s website directly within the Spotify app (see example below). Users can also return to the episode later to reclaim the code at a future date as well. Direct-to-consumer brands such as Harry’s and Hello Fresh are testing the feature.
Richman says In App Offers “productizes” coupon codes “in a way where consumers have a direct connection with brands and marketers can understand to a much greater degree the efficacy of their ad spend.”
If successful, In App Offers would provide marketers with the same measurement and targeting tools they enjoy in established areas such as display advertising, according to Richman. Big picture, In App Offers represents the culmination of Spotify’s advertising technology stack. The company envisions a future where it has both the scale and measurement tools to make targeting listeners on par with other advertising juggernauts such as Google and Facebook.
“We want to be one of the great ad platforms out there,” says Richman. “We don’t get referenced along with the duopoly or other challenger platforms, but we are building a similar [advertising] stack in a totally different medium which is audio.”
Earlier this year, Spotify introduced Streaming Audio Insertion, or SAI, for its growing podcast business. Previously, prerecorded ads lived within podcasts indefinitely (i.e. MailChimp ads are still heard in shows such as “Serial” after five years), hindering marketers from achieving the scale they often desire. Now, however, two people listening to the same podcast can hear two totally different ads.
Richman says SAI and In App Offers go hand-in-hand.
“The podcast ad experience today is great from a consumer standpoint but it is totally broken from an advertiser standpoint because, up until now, there has been no way to target, measure or engage with a podcast ad,” says Richman. “What SAI does is solves the first two of those challenges by making podcasts addressable. The third, engagement, introduces interactivity with In App Offers, allowing the user to engage directly with the ad format itself.”
The company has been on a buying spree to build up its podcast inventory. Last week, it struck a deal with Warner Bros. to bring the DC comics universe to its platform. That same day, it announced Kim Kardashian would produce a crime series podcast. It also made “The Joe Rogan Experience” exclusive to its platform. Gimlet Media and Bill Simmons’ “The Ringer” count as two other high-profile acquisitions for the company.
Richman says that SAI has the ability to aggregate its treasure trove of podcast shows into large aggregate ad buys. “That didn’t exist in the download world,” he says. “As our catalog grows, the opportunity goes beyond show-based selling and toward toward true audience at scale."
Podcast advertising is estimated to generate $1 billion in ad revenue in 2021, according to the Interactive Advertising Bureau.